7 things to keep in Mind during setting up your Company Accounts

Running a business involves not just selling products or providing services but also keeping track of its finances. It is essential to maintain accurate and up-to-date company accounts. In this article, we will discuss how to manage company accounts in the UK, including what is CT600, expenses that can be claimed, some allowances like mileage allowances, capital allowances, the deadline for submission, fines for missing the deadline, and whether you need to submit company accounts multiple times.

What is CT600?

CT600 is the Corporation Tax return form that all companies in the UK must submit to HMRC every year. If you haven’t heard it, I suppose you are going to be familiar with it in the coming years. Anyways, the form requires companies to declare their profits or losses and calculate the amount of corporation tax they owe. The CT600 form can be submitted online or by post and must be accompanied by a set of financial statements, including a profit and loss account, balance sheet, and notes to the accounts.

What are the Expenses that can be claimed?

It is critical to determine what costs your firm may claim while creating your company accounts. These costs can be deducted from your company’s profits, lowering the amount of corporation tax owed. Salary and wages, rent, insurance, business travel, and accounting fees are all common expenditures that might be claimed. However, it is critical to keep precise records and invoices for all firm costs.

Mileage allowances for employees

Employees who use their own vehicles for work travel at your organisation may be eligible for mileage reimbursement. Employees receive a tax-free mileage allowance to cover the expense of driving their automobiles for work activities. In the United Kingdom, the mileage allowance is 45p per mile for the first 10,000 miles and 25p per mile after that. You can read more about business mileage rates over here.

Capital allowances for companies

When a business purchases assets such as machinery or equipment, it can claim capital allowances to decrease the amount of corporation tax owed. However, the amount of capital allowances a corporation can claim is determined by the type of asset acquired and the government’s allowance rate.

Company Accounts Deadline for submission

The deadline for submitting company accounts and the CT600 form to HMRC is nine months after the end of the accounting period. For example, lets say that your accounting period ends on 31 December. Then deadline for submitting your company accounts and the CT600 form is 30 September of the following year. It is important to note that the deadline is not just for submitting the form but for paying the corporation tax owed as well.

Fines for missing the deadline for company accounts

If a company fails to submit its accounts and the CT600 form by the deadline, it may face penalties from HMRC. The size of the company and when you submit the accounts determine the size of the penalty. You can find the fines from the below table.

Length of period (measured from the date the accounts are due)Penalty for a private company or LLPPenalty for a public company
– 1 month£150£750
+1 month but – 3 months£375£1,500
+ 3 months – 6 months£750£3,000
+ 6 months£1,500£7,500

Do I need to submit company accounts multiple times?

If a company’s accounting period covers more than 12 months, it may need to submit company accounts more than once. For example, if a company’s accounting period covers 18 months, it will need to submit two sets of accounts and CT600 forms. Also, the first set will cover the first 12 months, and the second set will cover the remaining six months.

Don’t have the time to do extensive research? Want someone to handle your accounts? Feel free to connect with us and let us do the rest.

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